INSTANT VIEW 3-Czech Aug C/A gap below fcast

                                
 PRAGUE, Oct 12 (Reuters) - The Czech current account showed
an 8.46 billion crown ($480.4 million) deficit in August,
smaller than the 10.0 billion gap forecast by analysts, data
showed on Monday.
                                
 The income balance showed a 19.65 billion crown gap, below
last year's 24.89 billion but higher than the 18.29 billion gap
in July.
                                
 It reflected a dividend payment of 12.8 billion crowns from
Czech subsidiaries to their foreign parent firms and estimated
reinvested earnings of 8.7 billion crowns, the central bank
said. 
                                
 The 12-month rolling deficit dipped to 86.6 billion crowns
($4.92 billion), or 2.3 percent of 2008 gross domestic product
(GDP), according to Reuters calculations.
****************************************************************
KEY POINTS:
(CZK billions)           Aug           July         Aug forecast
Current Account          -8.46         -3.06       -10.0
Financial Account        22.01         11.57         n/a
Net Direct Investment     4.14         12.42         n/a

 (For full table, double click on [ID:nPRA004807])
                                
 
- The balance of goods and the services balance ran a surplus.
- The balance of current transfers includes a deficit of 2.8
billion crowns on transfers from the Czech Republic to the EU
budget.
- The annual current account deficit total has been decreasing. 
- Capital inflow on the financial account was approximately 22
billion crowns under ECB methodology.
- The net inflow of direct investment was 4.1 billion crowns and
was affected by a decrease in equity capital by foreign
investors in some domestic corporations, the estimated amount of
reinvested earnings and the net repayments of loans to the
related entities in the foreign investor group. 
- Sales of a part of equity securities from the non-bank
portfolio and an increase in holdings of government bonds by
foreign investors led to net inflows of portfolio investment
of 11.1 billion crowns. 
- The annual net direct investment inflow total has been
gradually falling.
- The annual net portfolio investment shows a slight inflow of
funds.
- Other investment showed a surplus of 2.3 billion crowns, due
to a change in the short-term international position of banks
(an increase in short-term liabilities in particular).
- The government drew on EIB loans of 1.8 billion crowns for
anti-flood measures.
- The Czech central bank' s international reserves (adjusted for
valuation changes) fell by 4.5 billion crowns.
                                
  
COMMENTARY:
                                
 MIROSLAV FRAYER, ECONOMIC AND STRATEGY RESEARCH, KOMERCNI
BANKA
                                
 "In comparison with the last month the current account
surprised positively with a 22 billion surplus on the financial
account, mainly thanks to the inflow of portfolio investment."
                                
 "Repatriation of profits is the main reason for negative
income balance. But lower profitability of domestic companies
should lower this outflow."
                                
 "Financing the current account deficit will not be so easy
as in past years. With regards to the global financial crisis,
the volumes of foreign direct investment shrink. The gap will be
financed mainly through inflow of means from EU structural
funds."     
                                
 
 PETR DUFEK, ANALYST, CSOB
                                
 "The current account brought no big surprise. The relatively
lower deficit is due to the good foreign trade result.
Everything points to the fact that the current account deficit
this year will be lower than last year, partly due to cheaper
oil lowering imports in the Czech Republic."
                                
 
 VOJTECH BENDA, CHIEF ECONOMIST, ING
                                
 "There is some slowdown in foreign investment inflows but
the monthly numbers are a rough estimate... it is difficult to
make strong implications based on this."
                                
 "There is nothing worth much attention. The good thing is we
do not see some outflow of cash from domestic companies or that
parent companies would drain cash from here so when there is a
turnaround they will have resources to invest again."
                                
 
MARKET REACTION:
                                
 Crown marginally firmer at 25.875 to the euro <EURCZK=> from
25.900 ahead of the data.
                                
 
  BACKGROUND:
- Analyst expectations before data release        [ID:nL2130434]
- Czech Aug foreign trade figures                 [ID:nL7543979]
- Polish July C/A data                            [ID:nLB438840]
- Slovak July C/A data                           [ID:nPRG003665]
- Hungary's Q2 C/A gap                            [ID:nLT293744]
- Report on last Czech c.bank rate decision.......[ID:nLO326900]
                                
                 [ID:nL295066] [ID:nL2194111] [ID:nPRA004776]

LINKS:
- For further details on August of payments numbers and past
data, Reuters 3000 Xtra users can click on the Czech National
Bank's website:
                                
 http://www.cnb.cz/en/statistics/bop_stat/

- For LIVE Czech economic data releases, click on       <ECONCZ>
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- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH]
- For Czech money markets data click on                <CZKVIEW>
- Czech money guide                                      <CZK/1>
- Czech benchmark state bond prices                   <0#CZBMK=>
- Czech forward money market rates                      <CZKFRA>

 (Reporting by Jana Mlcochova)